About BitConnect
Bitconnect was released in 2016 to allow users to lend the value of Bitconnect Coin in return for interest payments. The marquee program was the so-called lending platform where users traded Bitcoin for Bitconnect Coin and could lock in the instantaneous value of the coin for a set period while earning interest calculated daily. The interest payouts were determined by a so-called “trading bot”. The trading bot was the most controversial piece of Bitconnect. co system. The liquidity of the BCC cryptocurrency funded users’ ability to exchange their earnings for Bitcoin.
SEC
The Securities and Exchange Commission, or SEC, is an independent federal regulatory agency tasked with protecting investors and capital, overseeing the stock market, and proposing and enforcing federal securities laws.SEC protects investors by enforcing our nation’s securities laws, taking action against wrongdoers, and overseeing our securities markets and firms to ensure that investors are treated fairly and honestly.
NEWS
Indicted by the United States Department of Justice in a $2.4 billion Ponzi scheme, BitConnect founder Satish Kumbhani remains untraced following his conviction. In a court filing on Monday, the Securities and Exchange Commission said that the whereabouts of Kumbhani remains unknown. The SEC noted that Kumbhani’s last known location was in his native country India, but has remained untraced ever since the promoter for his BitConnect Ponzi scheme was charged by the SEC for defrauding American investors of over $2 billion.
The Transmitting Business and Conspiracies
SEC in its filing noted that the convicted founder has most probably fled to a foreign country and “Kumbhani’s location remains unknown, and the Commission remains unable to state when its efforts to locate him will be successful, if at all.” The founder is charged with wire fraud, operating an unlicensed money transmitting business, and three conspiracies: committing wire fraud; commodity price manipulation; and international money laundering. BitConnect founder is being sued for illegally raising funds and defrauding American investors of over $2 billion.
Global Investors of The BitConnect
The BitConnect saga dates back to the ICO era and was among the most highlighted and talked about projects at the time. Founded in 2016, the crypto project became a global sensation by mid-2017 as it raised billions of dollars from global investors. The project promised a lending program based on a proprietary “trading bot” and “volatility software” that would offer 10% earnings to investors via BCC token.
The DOJ charged Kumbhani for running a Ponzi scheme via BitConnect’s lending program where the project managed to siphon off $2.4 billion from investors. Bitconnect’s native token BCC recorded an all-time-high trading price of $463.31 at the peak of the market frenzy in December 2017 reaching a market cap of $3.4 billion.
Demand for BCC: DOJ Defines
The founders pulled the project by January 2018, crashing the token price to near zero and causing massive losses to investors. The DOJ also accused Kumbhani of creating fake market demand for BCC to lure more unsuspecting investors. The project, like many others in the ICO era, turned out to be a massive pyramid scheme where the creators used early funds to pay off old investors and later ran away after collecting billions based on hype and the ICO craze. Several promoters of the project across Australia and the U.S. have already been convicted and facing jail.
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